Conceived by two former Tesla executives in 2016 — when money was practically free and inflation a distant memory from a bygone era — Northvolt moved ahead quickly in its early years. By 2019, the company, which counts Volkswagen and Goldman Sachs Group Inc.’s asset management arm among investors, had three factories under development. Its first lithium-ion battery cell was assembled in December 2021.
Northvolt’s stated aim has been global capacity of 230 gigawatt-hours by 2030 across its factories, or enough batteries to power about 3.8 million vehicles. Currently, its only running site Ett, near the Swedish city of Skelleftea, has a 16 gigawatt-hour capacity, according to BloombergNEF.
In addition to that site, Northvolt said this month it “remains committed” to its NOVO joint venture with Volvo Car AB in Sweden, Northvolt Drei in Germany and Northvolt Six in Canada. It plans to communicate timelines and potential cost savings at those locations this fall.
“It’s all about scale,” then-Chairman Jim Hagemann Snabe said in early 2023, underscoring the breadth of its push into the new technology.
But scale is something the company has had trouble with.
It has been stymied by severe quality problems — like a high number of faulty cells that can’t be used — and an inability to quickly ramp up mass production, both of which have raised its costs and restricted revenue. A €2 billion order was canceled by BMW in June — citing quality issues. Volkswagen’s truckmaking arm Scania once complained about slow deliveries.
Still, Volkswagen said it remains a supporter of Northvolt’s ramp-up. BMW, too, is keeping the door open to include Northvolt at some point as a next-generation cell supplier, but that’s contingent on the company showing it can produce those Gen6 round cells to the carmaker’s specifications and at scale, according to people familiar with those discussions.
“Trying to simultaneously scale manufacture across multiple value chain segments is hard,” said Antoine Vagneur-Jones, head of trade and supply chains, energy transitions at BloombergNEF.
Early on, Northvolt co-founder Peter Carlsson had singled out access to competence as a bottle-neck, saying in 2021 that “it’s incredibly hard to get a hold of great cell designers and people with extensive experience in building these kinds of factories.”
As the company works through its woes, the Swedish government has made clear it won’t be bailing it out and Germany says it’s in “constant contact” with Northvolt. Analysts like BloombergNEF’s Vagneur-Jones say the EU may be forced to act, and may even be “investigating the possibility of tariffs on batteries.”
But for some observers, it’s a losing battle.
“This is a market that will undergo seismic changes in the coming 20 years, and I don’t see European companies leading the charge,” said Erixon.
(By Kati Pohjanpalo, Charles Daly and Jonas Ekblom)
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Publish date : 2024-09-26 10:05:00
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